Posts Tagged ‘AT&T’

Starbucks has finally joined the wireless revolution, by announcing that they’ll be offering free Wi-Fi at 6,700 locations beginning on July 1st.

This monumental news comes six months after McDonalds began offering free Wi-Fi to customers in 11,500 of its restaurants.

This strategic move by Starbucks will ultimately result in increased revenue and traffic at many of its famous Seattle-based coffee houses — in some ways, even more than McDonalds.

The Strategy

Starbucks hopes to increase traffic to it’s 6,700 selected locations by offering their loyal customers with an added benefit, free Wi-Fi. In today’s digitally connected world, a cup of quality coffee and a laptop (or mobile smart-phone) have become synonymous all across the country. Starbucks hopes to divert potential patrons from other venues such as McDonalds, Panera Bread and others that offer free Wi-Fi.

The Return on Investment

Starbucks’ business model is one that will capitalize on having it’s clients remain in the venue for as long as possible. The longer the customers remain in the restaurant, the higher the probability that their patrons will require additional food and beverages. Since Starbucks doesn’t offer free refills on many of its products, it stands to reason that the potential to increase revenues from keeping their patrons in their venue longer, should increase.

The Catch

Starbucks will be relying on the AT&T Wi-Fi Service, and each patron is only allocated two consecutive hours a day of complimentary Wi-Fi service. However, AT&T DSL customers will have unlimited Wi-Fi acess free of charge, as will patrons with Wi-Fi enabled AT&T mobile devices (iPhone/BlackBerry). If you’re not an AT&T customer, you can purchase two consecutive additional hours of Wi-Fi access for $3.99 on your Starbucks card.

While I typically only write about iPhones and iPhone applications, those of you that have known me prior to the iPhone revolution, know that I used to be an avid evangelist for Sony Ericsson and Nokia mobile devices.

On Wednesday, Sony Ericsson announced the Xperia X8, an Android 1.6 based Smartphone that aims to compete in the iPhone and Blackberry dominated smartphone market.

The Xperia X8 ships pre-packaged with all of the typical software utilities you;d expect from a smartphone at this point in the game, such as Gmail, Google Calendar, Google Maps, as well as the ability to install all of the available applications within the Android Market.

This of course is assuming that should the Sony Ericsson Xperia X8 debut on the AT&T network, whether or not they allow “off market” applications is yet to be determined. AT&T has has a long track record with disallowing “off market” applications from running on their devices, prompting the creation of a ever-changing subculture of mobile device jail-breaking communities for each new device introduced.

While no official announcement has yet to be made by AT&T, the Xperia X8 is likely to be debuted on the carrier since it supports AT&T’s 850 & 1900 HSPA network.

We are delighted to be able to bring the full experience of our XperiaTM smartphones to new consumers by delivering a fully featured device at a more accessible price point.

With the launch of the long-awaited iPhone 4 only a week away (June 24, 2010), the masses of existing and potential AT&T customers are wondering one simple thing — will AT&T’s network survive the impending tsunami of traffic and strain?

Like the embarrassing scenario Apple struggled with at this month’s Worldwide Developers Conference (WWDC), in which Steve Jobs had to ask members of the audience to turn off their wireless devices due to the lack of bandwidth available at the conference; will AT&T’s network face similar slow or non-existent data and call connections?

AT&T assures its customers that it is ready, but critics (including its own customers) seem doubtful in light of Tuesday’s fiasco involving the AT&T and Apple Web sites being overwhelmed by customers trying to pre-order the new iPhone 4. Customers received reoccurring error messages when attempting to access web sites, and those lucky enough to capture enough bandwidth to view web pages experienced long delays while trying to create or update their AT&T accounts.

Success Is Not Without A Cost

Just like with any other successful endeavor, success always carries a price. In AT&T’s case, the price was paid in the failure of it’s network to handle the exponentially increasing traffic. The Apple iPhone revolutionized the mobile phone industry because it was designed specifically for accessing the Net. It’s record-breaking popularity and ability to convert large numbers of new customers with every iPhone iteration, has created a tsunami of mobile data on the frail AT&T network, which has resulted in a some of the poorest rated service of any domestic mobile carrier.

AT&T Invests Billions Into Infrastructure

However, AT&T is pouring billions of dollars into its infrastructure in preparation for the surge of data traffic next week. They’ve increased their capital spending budget to between $18 billion and $19 billion for 2010 — approximately $2 billion more than in 2009. Included in their network upgrades are 2,000 new mobile cell towers, and three three times more fiber-optic links to their existing cell sites than in 2009.

Ultimately, AT&T will upgrade to a 4G technology called Long Term Evolution, or LTE. Testing of the technology will commence late in 2010, and with commercial deployments starting in 2011.

What AT&T’s Rivals Aren’t Saying

Meanwhile, AT&T’s rivals are definitely not sitting on their hands either. 4G wireless mobile service was introduced to consumers by Sprint/Nextel, and are offering phones optimized for the 4G network like the Google Android based HTC Evo. Verizon Wireless is frantically building its 4G network, and expanding its services to new markets in 2011. T-Mobile USA, the smallest of the major wireless providers, is also expanding into additional 25 markets by next year.

However, while these competitors claim to be more reliable, offer more coverage, and provide faster data speeds, the reality is that their claims are only based on networks with substantially less users and devices accessing them. There are a very limited number of devices that are capable of taking advantage of these advanced networks.

Sprint offers 4G via the HTC Evo

Verizon isn’t scheduled to release a 4G phone until mid-2011.

T-Mobile USA only offers data sticks for its HSPA+ network.

When comparing AT&T’s service to their competitors in today’s data-hungry smartphone market, it’s hardly a fair comparison. In fact, trying to compare the two would be like comparing rush hour traffic in L.A., CA to that of Raleigh, NC. There’s really no comparison, since the sheer number of cars in the Raleigh, NC area are an insignificant percentage of the traffic that commutes on L.A. freeways on a daily basis.

For example, T-Mobile has 5.2 million customers using 3G devices on its network, while AT&T has 15 million iPhone customers, not including all other 3G capable devices on the AT&T network.

“AT&T has been at the forefront of learning how wireless carriers deal with heavy data usage… They are really the pioneers. And if any other carrier had the kinds of traffic loads that AT&T has had to deal with as a result of the iPhone, then they would have the same problems. And for anyone to claim any different is crap.”

— Charles Golvin, a research analyst with Forrester Research

*If you enjoyed this article, or even if you didn’t, please feel free to leave a comment below!

Apple’s long awaited iPhone 3G finally hit the markets today, spurring a huge influx of businessmen, women, and the general public to Cingular/AT&T stores nationwide. Thanks to local Social Media celebrity Wayne Sutton, video clips of people waiting in line for the iPhone can be found at: http://qik.com/waynesutton

I personally will not be an “early adopter” of the newest, and even less cost-effective, iPhone gadget. Instead, I’m looking to save and smartly invest my hard earned gadget cash on whatever new “Super Smart” phone comes to market later this year.

Apple’s iPhone has set the bar and pace for the mass migration of the general public, into the seemingly endless possibilities which small electronics are capable of. What will we see next in mobile communications and technology? Maybe full integration of payment delivery programs? Mainly, the ability to use your phone as a RF credit card with encryption, as opposed to a fairly unchallenged plastic card?

Maybe it can serve as a digital “key,” paired with touch screen fingerprint verification technologies. The future of mobile electronics truly does seem endless, and I for one plan to be in as much of it as I can. The iPhone 3G however, does not boast enough differences (outside of the 3G and GPS features), to warrant the ravaging that AT&T and Apple would once again enflict upon my wallet.